Correlation Between Nuvalent and Genfit

Can any of the company-specific risk be diversified away by investing in both Nuvalent and Genfit at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nuvalent and Genfit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nuvalent and Genfit, you can compare the effects of market volatilities on Nuvalent and Genfit and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nuvalent with a short position of Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvalent and Genfit.

Diversification Opportunities for Nuvalent and Genfit

0.71

Correlation Coefficient

Nuvalent  Genfit

Poor diversification

The 3 months correlation between Nuvalent and Genfit is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nuvalent and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit and Nuvalent is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nuvalent are associated (or correlated) with Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Nuvalent i.e., Nuvalent and Genfit go up and down completely randomly.

Pair Corralation between Nuvalent and Genfit

Given the investment horizon of 90 days Nuvalent is expected to generate 0.8 times more return on investment than Genfit. However, Nuvalent is 1.24 times less risky than Genfit. It trades about 0.02 of its potential returns per unit of risk. Genfit is currently generating about 0.01 per unit of risk. If you would invest  7,797  in Nuvalent on October 24, 2024 and sell it today you would earn a total of  335.00  from holding Nuvalent or generate 4.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Nuvalent  vs.  Genfit

Nuvalent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvalent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Genfit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genfit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Nuvalent and Genfit

The main advantage of trading using opposite Nuvalent and Genfit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvalent position performs unexpectedly, Genfit can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Genfit will offset losses from the drop in Genfit's long position.

The idea behind Nuvalent and Genfit pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.